How Do I Add A Nominee To My Demat Account
A Quick and Easy Guide to Adding a Nominee to Your Demat Account
Adding nominees to your Demat account enables you to manage your investments more effectively and can help with tax planning. But adding nominees to your Demat account can be confusing and tricky, especially if it's the first time you've done it.
With the right information about how to add a nominee to a Demat account, adding one shouldn't take long at all. However, it's still important to follow all the necessary steps correctly so everything runs smoothly.
What Is a Nominee?
A nominee is an individual designated to receive securities or other assets in the event of the original holder's death. The nomination can be made by the account holder at any time and does not require the approval of the beneficiary.
If you're looking to add another person to your Demat account, then it's important to choose someone you trust completely. This article will tell you how to go about this quickly and easily and will also give you tips on how to check nominees in a Demat account.
Why Should You Add a Nominee to a Demat Account?
- It will help ensure that your assets are transferred smoothly during your death.
- It can help speed up the process of asset transfer if you become incapacitated.
- Adding a nominee can provide peace of mind knowing that your loved ones will be taken care of in the event of your death or incapacity.
- It can help avoid potential disputes among your heirs about who should inherit your assets.
- It is required by law in many cases (depending on your state). You may be breaking the law if you live in one of these states and have not added a nominee.
- Having a designated beneficiary for your insurance policies could prevent any lapse in coverage.
- It is important to note that most custodians require their clients to designate a beneficiary before they can execute trades on behalf of the client. This requirement applies whether or not there is an active nomination agreement on file with the company.
How Can You Add a Nominee to Your Demat Account?
Adding a nominee to your Demat account is quick and easy, and it gives you peace of mind knowing that your investments are taken care of in the event of your death. Here's a step-by-step guide on how to register a nominee to a Demat account:
- Log in using your 6-digit PIN or Biometrics.
- Click on 'Account' and then 'Profile.'
- Click 'My nominees' under 'Profile.'
- You will be redirected to the 'Nominee details' page, where you will click on 'Add nominee' or 'Opt-out.'
- Fill in the nominee details and then click on 'Continue.'
- Upload an ID proof of the nominee.
- Once the documents are uploaded, enter the 'Nominee share in %' you want to give to that nominee. You also have the option to add up to 3 nominees to your account.
- For an underage nominee, you'll need to add guardian details too.
- Once all the nominees are added, proceed towards 'eSign with Aadhaar OTP.' You can eSign if your mobile & Aadhaar are linked.
- Once you submit your request, it will need to go through the verification process. After all the documents are verified, your nominee request will be accepted and added within 24 to 48 hours. You will also receive an email/SMS confirming the same.
Things to Note When Adding a Nominee to Your Demat Account
There are a few things to keep in mind when adding a nominee to your Demat account.
- To qualify, the nominee must be an individual, not an entity such as a HUF, body corporate, partnership firm, trust, or society.
- After assigning a nominee, you also have to decide the rights of nominees in the Demat account.
- In the case of a joint Demat account, all the account holders must sign the nomination form.
- More than one nominee can be assigned. You can choose up to three nominees. Upon the account holder's death, you can specify to what extent shares or securities should be transferred to each nominee.
- Demat accounts of a non-individual entity cannot appoint a nominee. Individual account holders are only eligible.
- It is possible to designate a minor as a nominee. However, you must also provide details of the minor's guardian.
- Nominees can also be modified and removed at any point in time by submitting a duly completed form to your stock broker or Depository Participant.
Adding a nominee to your Demat account is quick and easy, and it gives you peace of mind knowing that your investments are protected. Plus, it can make things easier for your loved ones if something happens to you.
For example, if you die without adding a nominee to your account, your assets will be handed over to the court system or government-appointed executor. Many people don't want this type of control over their assets or what happens to them when they pass away, so adding a nominee will give them more options on how they want their assets handled.
Some Common FAQs
If I am a Stock Broker, Can I Open A Demat Account For A Trader/ Investor?
A stock broker can open a Demat account for a trader/investor. The process is the same as opening a Demat account for an individual. This will allow the investor to have complete ownership and control of his investments without any limitations.
Can I Open my Demat Account Online?
A Demat account can be opened online, but you may need help from a stock broker.
What documents do I need to submit to open a Demat account?
A few documents are required for opening a Demat account. First, you will need to submit the following personal details:
- Proof of identity (Passport/Driving License)
- Proof of address (Household electricity bill/Telephone bill)
- Proof of income/Income Tax Slips or IT returns filed within the last six months
- Copy of PAN card or Form 60.
- Passport size photograph
- Your physical Signatures
What Are There Charges/ Fees To Open A Demat Account?
You may have to pay a fee to open your brokerage account if the broker charges for that service. Apart from that, an annual fee may also be involved in maintaining the account.
What are the different types of accounts that I can have?
There are three main accounts: the single nominee account, the joint account, and the company nominee account. The first is used when you want to invest in stocks but don't want others to have access to your investment decisions.
Joint accounts work well for couples who need to save up for a major purchase, such as buying their own house. Lastly, company nominee accounts allow companies to store shares they have purchased on behalf of their clients who might not have an individual Demat account.